Your Right to Know

Ohio is “the wild, wild West” when it comes to the way landlords can charge tenants for
utilities because of an absence of rules that leads to abuses, says the co-sponsor of a measure to
address the issue.

A first committee hearing on that measure, House Bill 422, took place yesterday in the Ohio
House. It is a response to the practices of some “submeter” companies that contract with landlords
to resell electricity and water. The conduct came to light in
a series of
Dispatch reports in October.

“Tenants get bills with no actual usage amount, no stated rate for what they may have used, fees
which no one explains to them, costs and administrative charges which they have no understanding
of, et cetera,” said Rep. Mike Foley, D-Cleveland, who co-sponsored the bill with Rep. Terry Blair,
R-Washington Township.

Blair and Foley concede that landlords likely would cover the costs through higher rents. They
say this still would be an improvement from the current situation, in which people sign leases and
only discover the high cost of utilities after the fact.

When asked about what rules already are in place, Foley said, “Right now, it’s kind of the wild,
wild West.”

Republican committee members, who are in the majority in the House, expressed concerns that the
bill might be too far-reaching in its approach and lead to lawsuits against landlords.

“I just wonder if all this is necessary, if it can be done through transparency and letting the
market function,” said Christina Hagan, R-Marlboro Township.

There is at least one other bill being written that would put limits on submeter companies, to
be sponsored by Rep. Ross McGregor, R-Springfield. He continues to work on the issue, an aide
said.

The
Dispatch report cited examples of customers paying between 5 percent and 40 percent more
for electricity than they would have paid at regulated prices. Ohio is one of eight states without
laws or rules restricting these practices. This conduct would be against the law in most
states.

The submeter industry has been around for decades, setting up meters in apartments and
commercial complexes to help allocate utility costs to individual tenants that otherwise would go
to the property owner. Most submeter companies pass through the cost of the electricity and water,
plus a billing fee of a few dollars.

Several Ohio companies have a different model in which they resell electricity at a profit, in
addition to fees.

The Utility Management and Conservation Association, a national trade group for the submeter
industry, says there is a key distinction between a landlord who is merely trying to recover
utility costs and one who is trying to turn utilities into a profit center. The association says
that the proposal would harm both types of landlords, even though most of the problems in Ohio stem
from the latter type.

“H.B. 422 is overly broad, confusing, and seeks to significantly alter the nature of the
landlord-tenant relationship,” the association said in a statement.